Sandy,a Cash Method of Accounting Taxpayer,has a Basis of $46,000

Sandy,a cash method of accounting taxpayer,has a basis of $46,000 in her 500 shares of Newt Corporation stock.She receives the following distributions as part of Newt's plan of liquidation. $$\begin{array} { | l | r | } \hline \text { March } 31,2007 & \$ 10,000 \\\hline \text { July 15, 2007 } & 10,000 \\\hline \text { November 15,2007 } & 10,000 \\\hline \text { Tanuary 15, 2008 } & 10,000 \\\hline\end{array}$$ The amount of the final distribution is not known on December 31,2007.What are the tax consequences of the distributions?

A) Sandy will recognize a loss of $4,500 in 2007 and a $1,500 loss in 2008.
B) Sandy will recognize the entire loss in 2007.
C) Sandy will recognize the entire loss in 2008.
D) None of the above is correct.